China Home Prices Up for 10th Month in March: Survey

Monday, 1 Apr 2013 | 2:42 AM ETReuters

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At a property trade fair in Beijing, China

Average home prices in China's 100 biggest cities rose for the tenth straight month in March, a private survey showed, challenging policymakers who are trying to cool record home prices with mixed results.

Average home prices in March climbed 1.1 percent from February to 9,998 yuan ($1,600) per square meter, said China Real Estate Index System (CREIS), a consultancy tied to China's largest online property firm Soufun Holdings.

The survey also showed home prices rose 3.9 percent in March from a year ago, up from February's 2.5 percent annual rise and marking the fourth consecutive month of annual increase.

Prices rose despite the government having tried to calm the house market over the last three years, making its latest move over the weekend when 12 cities, including Beijing and Shanghai, detailed strict property controls in heed of federal government orders.

"Panicky home buyers rushed to finalize sales before local governments began to implement the 20 percent capital gains tax on existing homes and some of them chose to buy new homes," CREIS said in a statement.

The price gains also suggest some property developers have cut, or scrapped, discounts on new homes due to recent strong property sales, CREIS added.

China's central government said on March 1 that it planned to introduce a 20 percent capital gains tax and higher down payments and mortgage rates for second-time home buyers in cities where prices were deemed to be rising too fast.

Average home prices in China's top 10 cities, including Beijing and Shanghai, rose 1.3 percent in March from February and were up 6.1 percent from a year ago, according to CREIS.